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Demands from like-minded country groups aim for an acceptable marketing-level agreement

WASHINGTON, DC - 03/03/06 - The US has joined other countries in an initiative aimed at jump-starting the moribund World Trade Organization (WTO) services negotiations.

The US has decided to join 12 various groups of like-minded countries - called "friends" groups at the WTO in Geneva - in making demands for better access to markets in 12 services sectors, ranging from telecommunications to education, according to Deputy US Trade Representative Peter Allgeier.

"Services liberalization enhances the gains from liberalization in goods and agriculture by making the infrastructure of modern economies - express delivery services, reliable communications, financial services, transportation services and others - more widely available," he said.

According to Bob Vastine, president of the Washington, DC-based Coalition of Service Industries (CSI), the 12 friends groups comprise different mixes of developed and developing countries.

"Those groups are making demands mostly of large, rapidly growing developing countries," he said.

Their requests seek elimination of such barriers to trade as limits on foreign investment, nationality requirements, discriminatory regulations, limits on new entrants, prohibitions on branching and bans on Internet services.

The requests are not new for the US, Vastine said. 

What is new, he said, is the use of multiparty requests bringing countries together to pursue an ambitious level of agreement in the long-stalled WTO services negotiations.

"We haven't seen in Geneva ever before this kind of activity," Vastine said.  "It's a big deal. It really works."

He said the big developing countries facing demands to open their services markets have been complaining about the multiparty process, calling it confusing and counterproductive.

"But it's really disinformation by some of these large countries that don't, frankly, want to be faced with a lot of requests and don't want to feel like they've got to make offers," said Vastine.

The groups in which the US is participating are making demands to open markets in telecommunications; financial services; computer services; distribution services; express delivery; energy services; environmental services; legal services; construction; architectural and engineering services; and audiovisual and educational services. 

Between now and a June 30 deadline, the groups making requests and the countries expected to make offers are supposed to engage in intense rounds of discussions.

Washington will also have to face demands from developing countries' friends groups, especially in the so-called "Mode 4" of the services negotiations concerning increased temporary entry for workers from one country to supply services in another country - a politically sensitive issue in the US Congress.

"We would not be surprised if we were the recipient of a Mode 4 request," Deputy US Trade Representative Susan Schwab told reporters in a teleconference earlier this week. "If and when that arises we will have to figure out what to do about it."

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